Is The Government Giving Small Shops A Helping Hand?

If the Retail Development Bill, which requires local authorities to establish support schemes, becomes law, it will ensure help is made available for struggling, ‘class one’ shop premises, which might otherwise be forced to close. Authorities would have to advise existing retailers, or those proposing to open shops, about the different forms of ownership available to them. Financial support would also be available where three or more individuals formed a cooperative or partnership in order to run a small retail premises.
Under the bill, the Government would review the retail business rates applied to small shops, focusing on the levels as a percentage of annual turnover, in comparison with large and medium-sized premises. The review would take into consideration how rates impact on the profitability of a business, its ability to support its owners and employees, and the costs and benefits of reducing the rates.

“Local authorities have a vested interest in promoting the growth of local retailers,” said the FPB’s policy representative, Matthew Goodman. “This is a fantastic opportunity for the Government to lessen the impact that business rates have on small shops, both financially and administratively.”
The Government would also establish an Office for Retail Planning (ORP) to carry out various tasks, such as representing public concerns in the retail planning process, and promoting the interests of customers in relevant markets by encouraging competition. The ORP would be responsible for maintaining the availability of different classes of retail premises, as well as a broad range of high-quality retail services, across the UK.

Mr Goodman warned that care must be taken not to add to the existing burden of red tape faced by the owners of small businesses.

“We should also be wary of adding an additional layer of red tape to the planning process,” warned Mr Goodman. “In particular, this review should consider the administrative burden placed on small businesses from the creation of an ORP.”

Small retailers who own vacant premises are bracing themselves for a hike in business rates. From 1 April 2008, business rates relief for empty shops and offices will be limited to three months, and six months for factories. After this, they will have to pay the full amount. At present, empty retail and office properties pay only 50%, following an initial three-month exemption.

Speaking exclusively to the FPB, Lord Cotter said he hoped that the Bill would revitalise high streets by encouraging more small retailers to open shops.

“It will involve a business rates review in order to compare small shops’ costs, which are frequently unfairly high, against those incurred by large supermarkets and big businesses,” he explained. “The Bill will introduce a retail development plan for each area of the country to safeguard against the over-expansion of the supermarkets. There will be a number of provisions to maintain the character and diversity of high streets, involving the local community so that they have a powerful voice.”